Muscat: The Ministry of Finance confirmed that the average price of a barrel of oil is calculated at about $55 in the state’s general budget for the fiscal year 2023, taking into account the fluctuation of global prices as a result of unstable geopolitical events and the uncertainty surrounding the global economy.
The Ministry said that the total revenues approved in the state's general budget for the fiscal year 2023 were estimated at RO10.50 billion, down by 5 percent from what was approved in the 2022 budget. This is due to the decrease in gas revenues recorded in the general budget for the fiscal year 2023 due to the establishment of the Integrated Gas Company, which aims to transfer the net revenues from gas sales to the state treasury.
Oil revenues
Oil revenues were estimated in the approved budget for the year 2023 at about RO 5.320 billion, registering an increase of 18 percent compared to the approved budget in 2022, as oil revenues constitute about 53 percent of total public revenues.
As for gas revenues, they were estimated in the budget for the year 2023 at about RO1. 400 billion as a result of the establishment of the Integrated Gas Company, which will buy and sell gas, and transfer gas revenues to the state treasury. Gas revenues constitute 14 percent of total revenues.
Non-Oil revenues
Non-oil revenues were estimated in the approved budget for the fiscal year 2023 at about RO3.330 billion, down by 0.3 percent from what was approved in the 2022 budget.
It is estimated that current revenues in 2023 will amount to about RO 3.280 billion, of which revenues from value-added tax and excise tax are estimated to be about RO590 million, income tax revenues (on profits of companies and institutions) RO 560 million, and government revenues from the distribution of dividends by the Omani Investment Authority will be RO800 million, in addition to revenues from government service fees estimated at RO1.330 billion.
The total revenues and capital recoveries for the state's general budget for the fiscal year 2023 were estimated at about RO50 million.
Raising efficiency
The 2023 budget affirms government efforts to implement policies to develop public financial management and raise the efficiency of spending.
Thus, spending has been estimated according to a set of bases - estimating the expenditures of civil ministries according to the actual needs of all agencies and units, calculating the periodic bonus for employees, seniority promotions in 2012 as stipulated by the Royal Orders, in addition to financial control procedures, and the results of government agencies’ initiatives in reducing public spending, and not calculating the expenses of purchasing and transporting gas due to the establishment of the Integrated Gas Company (IGC).
Spending
Accordingly, the public spending for the fiscal year 2023 is estimated at RO11.350 billion, a decrease of 6.4 percent compared to the 2022 budget.
Current expenditures in the state's general budget for the fiscal year 2023 are estimated at RO8.620 billion - 35 percent of defense and security expenditures, 51 percent of civil ministries' expenditures, and 14 percent of public debt service.
The allocations for the item of expenditures of ministries and government units in the approved budget for the year 2023 were raised by 2.7 percent, estimated at about RO 4.4 billion, including the cost of periodic bonuses for employees and promotions of employees from 2012’s seniority.
As per the public debt service expenses, about RO1. 200 billion have been approved, by calculating the expected interest payments on existing and planned loans for the year 2023.
Development
The budget for the year 2023 allocated about RO900 million for development projects, distributed among the following sectors: 6.7 percent for the commodity production, 10.8 percent for the service production sector, 29.3 percent for the social structures, 42.1 percent for the infrastructure sector, and 11.1 percent for other sectors.
Spending on contributions and other expenditures in the 2023 budget was estimated at about RO1. 830 billion, which constitutes about 16 percent of total public spending.
It may be noted that an item (projects with a developmental impact) has been introduced, allocating about RO200, and the item supporting the social protection system gets RO384 million.
Social and basic sectors
The total approved spending for social and basic sectors amounted to about RO4.3 billion, or 38 percent of total public spending, distributed as follows - 44 percent for the education sector, 22 percent for social security and care, 12 percent for the housing sector, and 22 percent the health sector.
The estimated deficit in the 2023 budget is expected to amount to about RO1. 300 billion, 13 percent of total revenues, and three percent of GDP.
Deficit financing
The budget plans to finance the deficit of RO900 million through internal and external borrowing, and about RO400 million through withdrawals from reserves.
It is also mentioned that the Sultanate of Oman will not resort to borrowing and withdrawing from reserves to finance the budget deficit for the year in the event of an increase in public revenues and the achievement of additional financial revenues, especially the increase in the average price of a barrel of oil than what is approved.
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